ADP/ACP Test & Stopping Match Mid-year

[Guest Bdocbrock]

We have a plan with a 6/30/02 year end, entry dates are 7/1/01 and 1/102. Plan was making Deferral and Match contributions. In October of 2001, the sponsor decided to cease making match contributons. A notice was provided to the participants and the match was discontinued. I have plan compensation from 7/1/01-10/31/01.

We are looking for guidance as to whether or not we are allowed to run the ACP test from 7/1/01-10/31/01, or even from 7/1/01-12/31/01, or are we required to test on full year? If we use the short period for testing, this would not include any new plan entrants as of 1/1/02 who would be eligible to receive the match, however they will not be entitled to the match now simply because the employer has ceased making the contribution. The ADP test will be run for the full year.

Thanks for your assistance.

[E as in ERISA]

Are you using current year testing (comparing current year HCE ACP to current year NHCE percentage)? Do you qualify to switch to the prior year method (comparing current year HCE ACP to prior year NHCE percentage)?